Chapter 1- Overview of Financial Accounting Flashcards
1
Q
Financial statement users
A
- investors
- creditors
- management (internal user)
2
Q
Public corporations
A
- shares trade on a public stock exchange
3
Q
Private corporations
A
- whose shares do not trade publicly and are generally owned by a small number of people
4
Q
Corporation
A
- separate legal entity
- personal assets are protected
- single or multiple owners
- taxed
5
Q
Proprietorship
A
- single owners
- personal assets are at risk
- not taxed
6
Q
Partenership
A
- multiple owners
- personal assets are at risk depending
- not taxed
7
Q
Operating activities
A
- revenues and expenses
- sales to customers, collections, purchases of inventory, payments and wages
8
Q
Investing activities
A
- buying and selling of PPE
- buying and selling shares
9
Q
Financing activities
A
- from investors and creditors
- borrowing money, issuing shares, repaying loans, paying dividends
10
Q
Statement of Income
A
- measure the operating performance for a period of time
- revenues - expenses = net income
11
Q
Statement of Changes in Equity
A
- provide details on shareholders equity
- share capital and retained earnings
12
Q
Statement of Financial Position (Balance Sheet)
A
- present of info on assets and liabilities controlled by the company to provide future economic benefit
- assets = liabilities + S.E
13
Q
Statement of Cash Flows
A
- asses a company’s cash inflows and outflows
- includes all 3 business activities
14
Q
Notes
A
- provide additional information to items in the financial statement
15
Q
Assets
A
- resources controlled by entity
- expects future economic benefit
- event that gives ownership already happened
